Are Women Aware of Their Financial Risks?

Roughly 55% of Americans regret how they handled their retirement planning, women in particular. That’s because being female can bring distinct financial risks.

According to a recent survey from provider Global Atlantic Financial Group, 62% of women had regrets about their retirement planning compared with 47% of men. As a result, more women than men had to adjust their retirement lifestyle. For example, women cut more entertainment expenses (51% vs. 42%) and travel expenses (42% vs. 34%).

One likely reason that women regret their choices more is their tendency to put the needs of others first, sometimes to their own detriment. That is, women don’t save as much as they should because they prioritize paying for a child’s education or caring for an elderly parent.

This causes challenges when it comes to providing for one’s own late-in-life care. Women who find themselves widowed (because they live longer than men, on average) don’t want to be a burden on their children. But they wonder how they will pay for their care into their 90s.

The problem can be solved with careful financial planning. Purchasing a long-term-care policy using equity from a home, or renting out a home that’s larger than your needs, are creative solutions. But it’s important to plan early. The “sweet spot” for obtaining affordable long-term care insurance is age 50 to 70.

If you’re a woman worried about being in this situation, a financial professional can help you develop a long-term plan that accounts for all circumstances.

Five Financial Planning Trends You Should Know

When it comes to investing, it’s rarely a good idea to jump on a trend. But we do see certain trends in financial planning surface from time to time, and it can benefit you to understand them. Here are five trends to be aware of in today’s market.

1. Older people are working longer.

According to the American Association of Retired Persons, by 2022, the number of American workers age 50 or older is due to increase by 62%. They will consist of 35% of our workforce. Don’t automatically assume that won’t be you.

2. Increased longevity demands more financial planning. 

According to the Social Security Administration, the average life expectancy of a man who is currently 65 years old is 84.3. For a woman who has reached age 65, her life expectancy is 86.7. That means ensuring you don’t outlive your portfolio is more challenging than ever.

3. Second marriages require more estate planning. 

The American Psychological Association reports that 40% to 50% of married couples in the United States divorce, and many remarry. As a result, more of us must balance the legacy we leave our children with the needs of our new spouse.

4. Financial technology doesn’t replace the financial planner. 

Technology plays an increasing role in managing financial tasks, from tracking spending to helping with investments. Certainly, take advantage of these innovations. But remember, a computer can’t replace the knowledge of your individual financial circumstances that a personal financial planner possesses. Don’t miss out on everything your financial professional has to offer by relying solely on tech to manage your portfolio.

5. Tax cuts create opportunities. 

The Tax Cuts and Jobs Act brought sweeping changes to our tax laws in 2018. Tax brackets declined, alternative minimum tax exemptions increased, and a new 20% deduction for pass-through business income was revealed. Learn to make the most of these opportunities.